KIBU. I think all my letters are in PDF b/c my agent writes them and I comment. There are two camps for me. The first is for that rare house you really love. In that case you make a case for you being the buyer that seller should choose to live in their home that they have loved. This works best for sellers who are still living in their homes. The second is for that house that you think is overpriced. In that case you make a logical argument as to why it is better for the seller to sell to you now at your price, rather than hold out for a higher one.
I am being very general. Each letter we write is taiolored to the particular property, seller, neighborhood, and pricing. Key is to be honest. It is obvious you like the house or you would not be making an offer. Or it should be obvious anyway. But do you love it? If you do say so. If you don’t say so. I love many of the homes I wrote offers on, and really like others. One, the one example above, I lusted for, sheer violent lust. Shame on me. Lust kills self discipline and perspective. I don’t know how I stuck to my rules on that one, but somehow I did. It sold for way above my max anyway, so I would not have bent a rule, I would have shattered one, to get it.
Unless the house is truly unique, I think the logic type letter works best. Again, if the seller is still in the house, you have to consider a more personal approach in my view.
I always tell myself that the sellers are people who can be neighbors and friends. They are not the enemy. Some are ignorant and stubborn, but then again, I can be too, and they will learn on their own terms. I am not rooting for the market to continue falling indefinately. That will hurt everybody in the long run, renters and owners. The economy is a soup and codependent and not a partitioned and self sustaining. As I have stated, my market bottem expectation is around this time next year. There are ways to get a good deal while not contributing to the falling market, very creative ways. But while the market is falling, yes, I have to be cautions and agressive as a rational buyer.
Sellers can be irrational, but they are entitled to be. It is their house. One of my favorites in RSF lowerd her price once, in 2007, to 85% of her original asking in 2006. Unfortunately her comps continued falling to 76% of her second asking price. One neighbors home of about the same size and quality had listed for her same exact listing price. 6 months later it sold for 75% of that. Yet she stuck to her second asking. Recently, she “increased” her asking price because she was fed up with low ball offers and figures if she starts higher, so will they. At market price, I would buy her house, but not at her irrational price. She still lives in it and apparently can afford to be irrational. That is her right. She may not “have” to sell.
Anyway, I note that my rules are just that, my rules. They may not work for anybody but me. I have no unique insights here. They walk well worn paths. Just a unique perspective. I have no secrets. I am just trying to find a home to live in at a time when taking the plunge can be unsettling. In emotional times, I am trying to be unemotional and logical. I may still buy in the next month or so. I have gotten very very close these past few weeks. If I do, my new home will no doubt loose value over the next year and perhaps few years and if I do it according to my rules, I should not worry to much about it.
Soon I will be a seller. Simple rules there too. Fix every little thing wrong with it first. Get inspections done and a disclosure package before I list to show to buyers early. Prepare it for sale properly. Market it agressively. List it for less $/sf than any other home in the area. Drop the price after a short period if no interest. Draw a bottom line for sales price, and take any offer from a strong buyer above that line. Greed and shortsided hopes for a higher offer are the mind killers in this market for sellers. Work the probabilities, not the possibilities. Do not keep it on the market more than 150 days max. Rent it after that. I can cover my mortgage and a little more than that, but not all taxes and insurance, so it will run a bit cash negative.
